EXHIBIT 10.70


 


	
  Ohio Valley
  Electric Corporation

  	
   

  	
  Original Sheet No. 197

  
	
  Indiana-Kentucky
  Electric Corporation

  	
   

  	
   

  
	
  151
  Revised Rate Schedule FERC No. 4

  	
   

  	
   

  



 


MODIFICATION NO. 13




TO


 


INTER-COMPANY POWER AGREEMENT


 


DATED JULY 10, 1953


 


AMONG


 


OHIO VALLEY ELECTRIC CORPORATION, 


ALLEGHENY ENERGY SUPPLY COMPANY, L.L.C.


(successor to West Penn Power Company)


APPALCAHIAN POWER COMPANY (formerly


APPALACHIAN ELECTRIC POWER COMPANY),


THE CINCINNATI GAS & ELECTRIC COMPANY,


COLUMBUS SOUTHERN POWER COMPANY (formerly


COLUMBUS AND SOUTHERN OHIO ELECTRIC


COMPANY),


THE DAYTON POWER AND LIGHT COMPANY,


INDIANA MICHIGAN POWER COMPANY (formerly


INDIANA & MICHIGAN ELECTRIC COMPANY),


KENTUCKY UTILITIES COMPANY, LOUISVILLE GAS


AND ELECTRIC COMPANY MONONGAHELA POWER


COMPANY, OHIO EDISON COMPANY,


OHIO POWER COMPANY (formerly THE OHIO


POWER COMPANY),


PENNSYLVANIA POWER COMPANY,


THE POTOMAC EDISON COMPANY,


SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, and


THE TOLEDO EDISON COMPANY.


 


Dated as of May 24, 2000


 


	
  Issued
  by: Dave Hart

  	
   

  	
  Effective: June 1, 2001 

  
	
   

  	
  Vice
  President and Assistant to the President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Issued
  on: June 15, 2001

  	
   

  	
   

  



 

















 


	
  Original Sheet No. 198

  



 


MODIFICATION NO. 13


 


TO


 


INTER-COMPANY POWER AGREEMENT


 


THIS AGREEMENT dated as of the 24th day of May, 2000, by and
among OHIO VALLEY ELECTRIC CORPORATION (herein called “OVEC” or “Corporation”),
ALLEGHENY ENERGY SUPPLY COMPANY, L.L.C. (successor to WEST PENN POWER COMPANY),
APPALACHIAN POWER COMPANY, THE CINCINNATI GAS & ELECTRIC COMPANY, COLUMBUS
SOUTHERN POWER COMPANY (formerly COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY),
THE DAYTON POWER AND LIGHT COMPANY, INDIANA MICHIGAN POWER COMPANY (formerly
INDIANA & MICHIGAN ELECTRIC COMPANY), KENTUCKY UTILITIES COMPANY,
LOUISVILLE GAS AND ELECTRIC COMPANY, MONONGAHELA POWER COMPANY, OHIO EDISON
COMPANY, OHIO POWER COMPANY, PENNSYLVANIA POWER COMPANY, THE POTOMAC EDISON
COMPANY, SOUTHERN INDIANA GAS AND ELECTRIC COMPANY and THE TOLEDO EDISON
COMPANY, all of the foregoing, other than OVEC, being herein sometimes
collectively referred to as the Sponsoring Companies and individually as


 


a
Sponsoring Company.


 

















 


	
  Original Sheet No. 199

  



 


WITNESSETH THAT


 


WHEREAS, Corporation and the United States of America have heretofore
entered into Contract No. AT-(40-1)-1530 (redesignated Contract No. E-(40-1)-1530
later redesignated Contract No. EY-76-C-05-1530 and later redesignated Contract
No. DE-AC05-76OR01530), dated October 15, 1952, providing for the supply by
Corporation of electric utility services to the United States Atomic Energy
Commission (hereinafter called “AEC”) at AEC’s project near Portsmouth, Ohio
(hereinafter called the “Project”), which Contract has heretofore been modified
by Modification No. 1, dated July 23, 1953, Modification No. 2, dated as of
March 15, 1964, Modification No. 3, dated as of May 12, 1966, Modification No.
4, dated as of January 7, 1967, Modification No. 5, dated as of August 15,
1967, Modification No. 6, dated as of November 15, 1967, Modification No. 7,
dated as of November 5, 1975, Modification No. 8, dated as of June 23, 1977,
Modification No. 9, dated as of July 1, 1978, Modification No. 10, dated as of
August 1, 1979, Modification No. 11, dated as of September 1, 1979,
Modification No. 12, dated as of August 1, 1981, Modification No. 13, dated as
of September 1, 1989, Modification No. 14, dated as of January 15, 1992,
Modification No. 15, dated as of February 1, 1993, and Modification No. 16,
dated as of January 1, 1998 (said Contract, as so modified, is hereinafter
called the “DOE Power Agreement”); and


 


WHEREAS, pursuant to the Energy Reorganization Act of 1974, the AEC was
abolished on January 19, 1975 and certain of its functions, including the
procurement of electric utility services for the Project, were transferred to
and vested in the Administrator of Energy Research and Development; and


 


2

















 


	
  Original Sheet No. 200

  



 


WHEREAS, pursuant to the Department of Energy Organization Act, on
October 1, 1977, all of the functions vested by law in the Administrator of
Energy Research and Development or the Energy Research and Development
Administration were transferred to, and vested in, the Secretary of Energy, the
statutory head of the Department of Energy (hereinafter called “DOE”); and


 


WHEREAS, the parties hereto have entered into a contract, herein called
the “InterCompany Power Agreement,” dated July 10, 1953, governing, among other
things, (a) the supply by the Sponsoring Companies of Supplemental Power in
order to enable Corporation to fulfill its obligations under the DOE Power
Agreement, and (b) the rights of the Sponsoring Companies to receive Surplus
Power (as defined in the Agreement identified in the next clause in this
preamble) as may be available at the Project Generating Stations and the
obligations of the Sponsoring Companies to pay therefor; and


 


WHEREAS, the Inter-Company Power Agreement has heretofore been amended
by Modification No. 1, dated as of June 3, 1966, Modification No. 2 dated as of
January 7, 1967, Modification No. 3, dated as of November 15, 1967,
Modification No. 4, dated as of November 5, 1975, Modification No. 5, dated as
of September 1, 1979, Modification No. 6, dated as of August 1, 1981,
Modification No. 7, dated as of January 15, 1992, Modification No. 8, dated as
of January 19, 1994, Modification No. 9, dated as of August 17, 1995,
Modification No. 10, dated as of January 1, 1998, Modification No. 11, dated as
of April 1, 1999, and Modification No. 12, dated as of November 1, 1999 (said
contract so amended and as


 


3

















 


	
  Original Sheet No. 201

  



 


modified and amended by this Modification No. 13 being herein and
therein sometimes called the “Agreement”); and


 


WHEREAS, it is the goal of OVEC to assist its Sponsoring Companies
during the summer of 2000 by making available to them additional power and
energy; and


 


WHEREAS, additional power would be made available as a result of
reductions by DOE of its contractual entitlement to power from OVEC; and


 


WHEREAS, it is desired that DOE release a portion of its contractual
entitlement to OVEC power and energy in exchange for payments based on the
value of such power and energy; and


 


WHEREAS, OVEC and the Sponsoring Companies desire to enter into this
Modification No. 13 as more particularly hereinafter provided;


 


NOW, THEREFORE, the parties hereto agree with each other as follows:


 


1.                                       Delete subsections 1.0124, 1.0125 and
1.0126 of the Inter-Company Power Agreement and substitute therefore the
following:


 


1.0124 “DOE Additional Power Release Period” means
the calendar months from June 1 through September 30, 2000.


 


1.0125 “DOE Additional Power Release” means a
reduction of the otherwise applicable DOE contract demand pursuant to this
Section 1.0125, for any calendar month during a DOE additional Power Release
Period.


 


1.0126 “Effective Date” means the date on which
Corporation notifies DOE and the Sponsoring Companies that all conditions to
effectiveness, including all required waiting periods and all required
regulatory acceptances or approvals, of the arrangements for a DOE Additional
Power Release and


 


4

















 


	
  Original Sheet No. 202

  



 


reimbursement of Corporation for costs associated with such release,
have been satisfied.


 


2.                                     Delete subsection 5.05 of the
Inter-Company Power Agreement and


 


substitute therefore the following:


 


5.05 Surplus
Energy. Corporation shall make available to each Sponsoring Company
Surplus Energy in proportion to said Sponsoring Company’s Surplus Power
Reservation, provided that when (a) the DOE’s contractual entitlement to power
from OVEC has been reduced and (b) one or more of the Sponsoring Companies have
agreed to assume responsibility for the charges associated with such reduction
in exchange for the right to receive Surplus Power made available thereby, the
Sponsoring Companies which have assumed responsibility for the charges
associated with such reduction shall have first priority to Surplus Energy up
to the amounts of their respective entitlements to Surplus Power made available
by their assumptions of responsibility for such charges. Any remaining Surplus
Energy shall be made available (through successive allotments if necessary) to
all Sponsoring Companies in proportion to their respective Power Participation
Ratios. No Sponsoring Company, however, shall be obligated to avail itself of
any Surplus Energy. Each Sponsoring Company availing itself of Surplus Energy
shall be entitled to an amount of energy (herein called billing kilowatt-hours
of Surplus Energy) equal to its portion, determined as provided above, of the
total Surplus Energy after deducting therefrom such Sponsoring Company’s
proportionate share, as defined below in this Section 5.05, of all losses which
would be incurred in transmitting the total of such Surplus Energy from the
345-kv busses of the Project Generating Stations to the systems of all
Sponsoring Companies availing themselves of Surplus Energy. The proportionate
share of all such losses that shall be so deducted from such Sponsoring
Company’s portion of Surplus Energy shall be equal to all such losses
multiplied by the ratio of such portion of Surplus Energy to the total of such
Surplus Energy. Each Sponsoring Company shall have the right, pursuant to this
Section 5.05, to avail itself of Surplus Energy for the purpose of meeting the
loads of its own system and/or of supplying energy to other systems in
accordance with agreements, other than this Agreement, to which such Sponsoring
Company is a party.


 


5

















 


	
  Original Sheet No. 203

  



 


3.                                  Delete subsection 6.01 and substitute
therefor the following:


 


CHARGES FOR SURPLUS POWER, ECAR EMERGENCY ENERGY AND
DOE ADDITIONAL POWER RELEASES


 


6.01 Total
Monthly Charge. The amount to be paid Corporation each month by the
Sponsoring Companies for Surplus Power and Surplus Energy supplied under this
Agreement shall  consist
of the sum of an energy charge, a demand charge and, if applicable, an
emergency power surplus and/or a DOE Additional Power Release Surcharge, all
determined as set forth in this Article 6. The amount to be paid to Corporation
for ECAR Emergency Energy supply under this Agreement shall be 98.74 mills per
kilowatt hour (plus transmission charges calculated in accordance with
applicable law).


 


4.                                     Delete subsection 6.024 and substitute
therefor the following:


 


6.024 Determine for such month the difference
between the total cost of fuel as described in subsection 6.021 above and the
sum of (a) the total energy charge to be billed DOE as described in subsection
6.022 above, (b) the energy charge to be billed as DOE Emergency Energy as
described in subsection 6.023 above and (c) the total cost of fuel used to
generate ECAR Emergency Energy. For the purposes hereof the difference so
determined shall be the fuel cost allocable for such month to the total
kilowatt-hours of energy generated at the Project Generating Stations for the
supply of Surplus Energy. For Surplus Energy made available to the Sponsoring
Companies by the reduction in DOE Contract Demand from 1899 MW to 1299 MW
during June through September 2000 (the “Released Demand”) and by DOE
Additional Power Releases, each Sponsoring Company shall pay Corporation for
each such month an amount obtained by multiplying the ratio of the billing
kilowatt-hours of Surplus Energy availed of by such Sponsoring Company during
such month to the aggregate of the billing kilowatt-hours of all Surplus Energy
availed of by all Sponsoring Companies during such month times the difference
determined hereinabove. For all other Surplus Energy, each Sponsoring Company
shall pay Corporation an amount equal to (i) an amount obtained by multiplying
the billing kilowatt-hours of Surplus Energy (other than Surplus Energy
associated with the Released Demand or with a DOE Additional Power Release)
availed of by such Sponsoring Company during


 


6

















 


	
  Original Sheet No. 204

  



 


such month by the average station heat rate of the
Project Generating Stations times the average cost per Btu (determined in a
uniform manner for all Sponsoring Companies in conformity with any applicable
requirements of Account 703 (Fuel) by said Uniform System of Accounts) of all
fuel consumed by said Sponsoring Company in its own generating stations, both
averages to be computed in respect of the month next preceding that for which
payment is being made, plus (ii) its Power Participation Ratio of the excess,
if any, for such month of the fuel costs of the Corporation allocable to the
total kilowatt-hours of energy generated at the Project Generating Stations for
the supply of Surplus Energy (other than Surplus Energy associated with the
Released Demand or with a DOE Additional Power Release) over the aggregate of
the amounts computed with respect to all Sponsoring Companies under (i) above,
minus (iii) its Power Participation Ratio of the excess, if any, for such month
of the aggregate of the amounts computed with respect to all Sponsoring
Companies under (i) above over the fuel costs of the Corporation allocable to
the total kilowatt-hours of energy generated at the Project Generating Stations
for the supply of Surplus Energy (other than Surplus Energy associated with the
Released Demand or with a DOE Additional Power Release).


 


5.                                       Delete subsection 6.038 and substitute
therefor the following:


 


6.038 DOE will be responsible for capacity costs
related to the Released Demand when and to the extent that energy associated
with the Released Demand is not received by the Sponsoring Companies because of
a curtailment or outage of Corporation’s generating plants or transmission
facilities (an OVEC Outage). Any transmission loading relief (TLR) which is not
caused by an OVEC Outage will not be considered an OVEC Outage.


 


6.                                       Insert after subsection 6.038, a new
subsection 6.039 as follows:


 


6.039 When, pursuant to the May 24, 2000 letter
supplement (“Supplement”) to the DOE Power Agreement, DOE and Corporation agree
to a DOE Additional Power Release and thereby to make additional Surplus Power
and Surplus Energy available to the sponsoring Companies, the aggregate demand
charge otherwise payable by each Sponsoring Company for Surplus Power shall be
adjusted to reflect its agreed share of a


 


7

















 


	
  Original Sheet No. 205

  



 


DOE Additional Power Release Surcharge, such DOE Additional Power
Release Surcharges to be equal to amounts per megawatt hour set forth below for
the Insured Sponsoring Companies, as defined herein, and for the other
Sponsoring Companies:


 


(a) For Insured Sponsoring Companies, the DOE
Additional Power Release Surcharge shall be their agreed share of the amount of
the DOE Additional Power Release under the Supplement times $50.76 per megawatt
hour during the calendar month of June 2000, $118.60 per megawatt hour during
the calendar months of July and August 2000 and $25.76 per megawatt hour during
the calendar month of September 2000 times the number of onpeak hours (5 x 16)
during each such month notwithstanding the fact that transmission loading
relief or outages or curtailments of Corporation’s generation or transmission
facilities may reduce deliveries of Surplus Energy which might otherwise be
made available to the Sponsoring Companies by the DOE Additional Power Release,
minus (a) the demand charges which DOE avoids by reason of the monthly
reduction in DOE contract demand required for the DOE Additional Power Release
to make additional Surplus Power available to the Insured Sponsoring Companies
and (b) charges for energy in amounts equal to such reductions in demand times
the number of on-peak hours during such month times Corporation’s energy rate
per MWH.


 


(b) For Sponsoring Companies other than the Insured
Sponsoring Companies, the DOE Additional Power Release Surcharge shall be their
agreed share of the DOE Additional Power Release under the Supplement times
$38.58 per magawatt hour during the calendar month of June 2000, $118.60 per
megawatt hour during the calendar months of July and August 2000 and $25.76 per
megawatt hour during the calendar month of September 2000 times the number of
on-peak hours (5 x 16) during each such month notwithstanding the fact that
transmission loading relief or outages or


 


8

















 


	
  Original Sheet No. 206

  



 


curtailments of corporation’s generation or transmission facilities may
reduce deliveries of Surplus Energy which might otherwise be made available to
the sponsoring Companies by the DOE Additional Power Release, minus (a) the
demand charges which DOE avoids by reason of the monthly reduction in DOE contract
demand required for the DOE Additional Power Release to make additional Surplus
Power available to Sponsoring Companies other than the Insured Sponsoring
Companies and (b) charges for energy in amounts equal to such reductions in
demand times the number of on-peak hours during such month times Corporation’s
energy rate per MWH.


 


The Sponsoring Companies listed below (“Insured
Sponsoring Companies”) will be the loss payees of a $18,800,000 insurance
policy in form and substance satisfactory to the Insured Sponsoring Companies
covering their obligations to Corporation for its payments to DOE for DOE
Additional Power Releases, when Surplus Energy associated with such releases is
not received by the Insured Sponsoring Companies because of curtailments or outages
of Corporation’s generation or transmission facilities other than curtailments
resulting from transmission loading relief (TLR). TLR caused by curtailments or
outages of Corporation’s generation or transmission facilities shall not
constitute TLR for purposes of the preceding sentence.


 


9

















 


	
  Original Sheet No. 207

  



 


Insured Sponsoring Companies


 


Kentucky Utilities Company Louisville


Gas and Electric Company Ohio Edison


Company Pennsylvania Power


Company The Toledo Edison Company


 


7.                                  Insert after subsection 10.07 new subsection
10.08 as follows:


 


10.08 DOE Additional Power Release
Surcharge.


Corporation shall render to each Sponsoring Company a statement
indicating the DOE Additional Power Release Surcharge due Corporation from such
Sponsoring Company pursuant to Article 6 above.
The total of such charges to the Sponsoring Companies shall in the aggregate
equal Corporation’s payment obligation to DOE for a DOE Additional Power
Release. Such Sponsoring Company shall make payment therefore by the date set
forth in such statement. In case the computation of the amount due cannot be
determined at the time, it shall be estimated subject to adjustment when the
actual determination can be made, and all payments shall be subject to
subsequent adjustment.


 


8.                                       This Modification No. 13 shall become
effective at 12:00 o’clock Midnight on the Effective Date.


 


9. The Inter-Company Power Agreement, as modified by Modification Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and
12 and as hereinbefore provided, is hereby in all respects confirmed.


 


10. This Modification No. 13 may be executed in any number of copies
and by the different parties hereto on separate counterparts, each of which
shall be deemed an original but all of which together shall constitute a single
agreement.


 


10

















 


	
  Original Sheet No. 208

  



 


IN WITNESS WHEREOF, the parties hereto have executed this Modification
No. 13 as of the day and year first written above.


 


	
   

  	
  OHIO
  VALLEY ELECTRIC CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  David L. Hart

  	
   

  
	
   

  	
   

  
	
   

  	
  ALLEGHENY
  ENERGY SUPPLY COMPANY, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  Peter J. Skrgic

  	
   

  
	
   

  	
   

  
	
   

  	
  APPALACHIAN
  POWER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  Henry Fayne

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  CINCINNATI GAS & ELECTRIC COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  John C. Procario

  	
   

  
	
   

  	
   

  
	
   

  	
  COLUMBUS
  SOUTHERN POWER COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  Henry Fayne

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  DAYTON POWER AND LIGHT COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  H. Ted Santo

  	
   

  
	
   

  	
   

  
	
   

  	
  INDIANA
  MICHIGAN POWER COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  Henry Fayne

  	
   

  
									



 


11

















 


	
  Original Sheet No. 209

  



 


	
   

  	
  KENTUCKY
  UTILITIES COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  Wayne T. Lucas

  	
   

  
	
   

  	
   

  
	
   

  	
  LOUISVILLE
  GAS AND ELECTRIC COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  Chris Hermann

  	
   

  
	
   

  	
   

  
	
   

  	
  MONONGAHELA
  POWER COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  Peter J. Skrgic

  	
   

  
	
   

  	
   

  
	
   

  	
  OHIO
  EDISON COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  H. Peter Burg

  	
   

  
	
   

  	
   

  
	
   

  	
  OHIO
  POWER COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/ Henry Fayne

  	
   

  
	
   

  	
   

  
	
   

  	
  PENNSYLVANIA
  POWER COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  Arthur R. Garfield

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  POTOMAC EDISON COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/
  Peter J. Skrgic

  	
   

  
							



 


12

















 


	
  Original Sheet No. 210

  



 


	
   

  	
  SOUTHERN
  INDIANA GAS AND ELECTRIC COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  J. G. Hurst

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE
  TOLEDO EDISON COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Guy L. Pipitone

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
						



 


13